Just days before he leaves office, Defense Secretary Leon Panetta is recommending military pay be limited, effectively decreasing troop salaries next year.

Panetta will recommend to Congress that military salaries be limited to a 1% increase in 2014. The Pentagon has calculated that the Labor Department's 2014 Employment Cost Index is expected to be above 1% but wants to still cut back on pay because of "budget uncertainties," a department official told CNN. In 2013, a 1.7% increase was approved, based on the index, which has been the basis for military pay for the last several years.

Three Pentagon officials have confirmed details of the plan to CNN. The Joint Chiefs of Staff have also agreed to Panetta's proposed pay plan. Final approval for the pay would come from Congress in the form of the 2014 budget.

The recommendation is tied to the Defense Department's 2014 budget recommendation, which was expected to be sent to Congress this month, one of the officials said. But the officials acknowledge it is going to be seen as an effort to push Congress to stop the automatic budget cuts that could go into effect if no deal is reached on spending reductions.

The decision comes as the secretary is stepping up the rhetoric about dire cuts at the Pentagon if sequestration goes into effect. President Obama in 2012 walled off military pay from cuts, so if this current pay plan goes into effect, it's widely seen as "cutting our pay," one military officer familiar with the plan told CNN. "It's a smart move, it puts it in Congress' hands," he said.

Panetta, in one of his last official speeches as secretary of defense, told an audience at Georgetown University on Wednesday that the Pentagon faced "the most serious readiness crisis in over a decade."

The defense secretary outlined a series of possible cuts should the Pentagon be forced to find half a trillion dollars more in savings. He warned that 800,000 civilian workers could furloughed for 22 days and that the Army would need to cut back on training and maintenance, putting two-thirds of combat teams at "reduced readiness levels." Pacific naval operations could be cut by as much a third, and Air Force flying hours and weapons maintenance could be cut.

CNN has also learned that this week, the Navy is expected to announce it does not have the money to pay for refueling and maintenance of the aircraft carrier Abraham Lincoln. That will essentially mean the Navy is short a carrier and overseas deployments will be cut.
"No good options exist," Panetta said.

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i think it might be a good thing if they redid the military pay and benefits. As a retired veteran (retired 20 years) iknow hte current system sucks and i could not live off of my pension, and any system that keeps retirees at pre civil war level and increases the active duty pay to levels never heard of before, it needs to be scrapped totally, maybe then retirrees could get a fair deal. People servicnng at the level i retired at make more than their civilian couterparts now, unheard of. when i retired a General made 72k a year, plus perks. it is crazy how many jobs i have to have now to make ends meet even with a pension. Now military members make more maney than civilians who have worked 20 years in for profit companies.

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Why should Military have to be treated any different, they are the ones whom stand watch and risk their life so we could all have freedom, not to mention all the family left behind when they die in the line of duty. Yet football player could earn 17 million dollars. Great system in place Obama.

We can't keep our military compenstated for protecting our country but we can pay for the healthcare and education of all the illegals that have broken the law by unlawful entry!

We can spend billions of dollars giving stimulus to companies on the verger of bankruptcy and when they do go belly up the CEOs contribute to Obama's re-election!

We would also have one heck of a lot of money to give the military raises and healthcare coverage if the government was not spending billions of dollars to launch Obamacare! Just the enrollment costs would take care of the military.

Stop funding the Middle East and Africa, cut food stamps, Medicaid, and other government crutches that are being abused. My husband is currently in Afghanistan as a US soldier, we don't ask for millions just far pay for the job done. Next time you jump in your car to get McDonald's, kiss your kids goodnight, lay down in a comfy bed, think of our military as they are always on alert 24/7 just to stay alive another day

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CNN's Security Clearance examines national and global security, terrorism and intelligence, as well as the economic, military, political and diplomatic effects of it around the globe, with contributions from CNN's national security team in Washington and CNN journalists around the world.